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Posts Tagged ‘Yuan’

Weaker Yuen is not gd for us

In China, Currencies, Economy on 02/07/2019 at 4:13 am

Neil Mellor at BNY Mellon, makes the case that so long as a weaker renminbi does not ensue, “there could still be positive implications for markets if no agreement, or an agreement to continue talking, were to trigger another, and possibly more substantial, round of stimulus from Beijing”.

That could well boost regional currencies, including those for Taiwan, South Korea, S’pore and the Philippines. A broader rally would bolster commodities, the Australian dollar and eurozone equities.

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US beats s*** out of China again

In China, Currencies on 29/06/2018 at 5:10 am

The renminbi fell for a fourth successive session, hitting its lowest point against the dollar of 2018. The US dollar is heading for its biggest monthly rise against the offshore renminbi since the early 1990s.

And yesterday, Wall St recovered from a really sharp fall the previous day which was a wild ride: on Wednesday market was up strongly, then reversed sharply, losing its initial gains and a lot more.

But

there was no respite for Chinese stocks, as the CSI 300 index closed at a fresh one-year low, taking it deeper into bear market territory.

FT

America is Great Again.

 

Yuan flexibility: winners & losers

In Economy on 22/06/2010 at 7:29 am

S’pore is a big winner because the world trade is the biggest beneficiary of greater yuan flexibility (better word than “revaluation”).

One loser — Overseas consumers of Chinese will likely pay higher prices.

Not certain if commodity producers will be winners or losers.

More

Update

Analysts at Credit Suisse reckon the renminbi is 50 per cent undervalued, while Chinese inflation recently hit a 19-month high. So, even if external pressure wanes as a result of its latest baby steps, the rationale for a bigger move is building.

With about 70 per cent of China’s foreign exchange reserves in dollars, mostly in Treasuries, maintaining the peg has helped keep the cost of US borrowing low in the face of record issuance. A quicker revaluation would act as a stealth monetary tightening not only in China but also the US. And, although isolated export industries in the US might benefit, the net effect on US equities would be negative if borrowing costs rise materially. Even commodities might suffer as lower Chinese fixed investment and damped US growth outweigh Chinese consumers’ enhanced buying power. Cheering markets should be careful what they wish for.